Medicare Program; FY 2026 Inpatient Psychiatric Facilities Prospective Payment System-Rate Update

DEPARTMENT OF HEALTH AND HUMAN SERVICES <SUBAGY>Centers for Medicare & Medicaid Services</SUBAGY> <CFR>42 CFR Part 412</CFR> <DEPDOC>[CMS-1831-P]</DEPDOC> <RIN>RIN 0938-AV46</RIN> <SUBJECT>Medicare Program; FY 2026 Inpatient Psychiatric Facilities Prospective Payment System—Rate Update</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This rulemaking proposes to update the prospective payment rates, the outlier threshold, and the wage index for Medicare inpatient hospital services provided by Inpatient Psychiatric Facilities (IPFs), which include psychiatric hospitals and excluded psychiatric units of an acute care hospital or critical access hospital. This rulemaking also proposes to revise the payment adjustment factors for teaching status and for IPFs located in rural areas. These proposed changes would be effective for IPF discharges occurring during the fiscal year beginning October 1, 2025 through September 30, 2026. We are proposing to make changes to measures used in the Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program, to update and codify the Extraordinary Circumstances Exception policy, and to solicit feedback through requests for information on future changes to the IPFQR Program. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> To be assured consideration, comments must be received at one of the addresses provided below, by June 10, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> In commenting, please refer to file code CMS-1831-P. Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed): 1. <E T="03">Electronically.</E> You may submit electronic comments on this regulation to <E T="03">http://www.regulations.gov.</E> Follow the “Submit a comment” instructions. 2. <E T="03">By regular mail.</E> You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1831-P, P.O. Box 8010, Baltimore, MD 21244-8010. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. <E T="03">By express or overnight mail.</E> You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1831-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. For information on viewing public comments, see the beginning of the <E T="02">SUPPLEMENTARY INFORMATION</E> section. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> The IPF Payment Policy mailbox at <E T="03">IPFPaymentPolicy@cms.hhs.gov</E> for general information. Nick Brock (410) 786-5148, for information regarding the inpatient psychiatric facilities prospective payment system (IPF PPS) and regulatory impact analysis. Kaleigh Emerson, <E T="03">kaleigh.emerson1@cms.hhs.gov,</E> for information regarding the inpatient psychiatric facilities quality reporting (IPFQR) program. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <E T="03">Inspection of Public Comments:</E> All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: <E T="03">https://www.regulations.gov.</E> Follow the search instructions on that website to view public comments. CMS will not post on <E T="03">Regulations.gov</E> public comments that make threats to individuals or institutions or suggest that the commenter will take actions to harm an individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments. <E T="03">Plain Language Summary:</E> In accordance with 5 U.S.C. 553(b)(4), a plain language summary of this rule may be found at <E T="03">https://www.regulations.gov/.</E> <E T="03">Deregulation Request for Information (RFI):</E> On January 31, 2025, President Trump issued Executive Order (E.O.) 14192 “Unleashing Prosperity Through Deregulation,” which states the Administration policy to significantly reduce the private expenditures required to comply with Federal regulations to secure America's economic prosperity and national security and the highest possible quality of life for each citizen. We would like public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries, and other interested parties participating in the Medicare program. CMS has made available an RFI at <E T="03">https://www.cms.gov/medicare-regulatory-relief-rfi.</E> Please submit all comments in response to this RFI through the provided weblink. <HD SOURCE="HD1">Availability of Certain Tables Exclusively Through the Internet on the CMS Website</HD> Addendum A to this proposed rule summarizes the fiscal year (FY) 2026 IPF PPS payment rates, outlier threshold, cost of living adjustment factors (COLA) for Alaska and Hawaii, national and upper limit cost-to-charge ratios, and adjustment factors. In addition, Addendum B to this proposed rule shows the complete listing of ICD-10 Clinical Modification (CM) and Procedure Coding System (PCS) codes, the FY 2026 IPF PPS comorbidity adjustment, and electroconvulsive therapy (ECT) procedure codes. Addenda A and B to this proposed rule are available on the CMS website at <E T="03">https://www.cms.gov/medicare/payment/prospective-payment-systems/inpatient-psychiatric-facility/tools-and-worksheets.</E> Tables setting forth the FY 2026 Wage Index for Urban Areas Based on Core Based Statistical Area (CBSA) Labor Market Areas, the FY 2026 Wage Index Based on CBSA Labor Market Areas for Rural Areas, and the FY 2026 CBSA Labor Market Areas are available exclusively through the internet, on the CMS website at <E T="03">https://www.cms.gov/medicare/payment/prospective-payment-systems/inpatient-psychiatric-facility/wage-index.</E> <HD SOURCE="HD1">I. Executive Summary</HD> <HD SOURCE="HD2">A. Purpose</HD> This proposed rule would update the prospective payment rates, the outlier threshold, and the wage index for Medicare inpatient hospital services provided by Inpatient Psychiatric Facilities (IPFs) for discharges occurring during fiscal year (FY) 2026, (beginning October 1, 2025 through September 30, 2026). This rule includes a proposal to revise the payment adjustment factors for teaching status and for IPFs located in rural areas. Lastly, this proposed rule would update a quality measure, remove four quality measures, and update and codify the Extraordinary Circumstances Exception (ECE) policy under the Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program. <HD SOURCE="HD2">B. Summary of the Major Provisions</HD> <HD SOURCE="HD3">1. Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS)</HD> For the IPF PPS, we propose to: • Revise the facility-level IPF PPS adjustment factors for teaching status and for IPFs located in rural areas. • Make technical rate setting updates: The IPF PPS payment rates will be adjusted annually for input price inflation, as well as statutory and other policy factors. This rule proposes to update: ++ The IPF PPS Federal per diem base rate from $876.53 to $891.99. ++ The IPF PPS Federal per diem base rate for providers who failed to report quality data to $874.57. ++ The electroconvulsive therapy (ECT) payment per treatment from $661.52 to $673.19. ++ The ECT payment per treatment for providers who failed to report quality data to $660.04. ++ The labor-related share from 78.8 percent to 78.9 percent. ++ The wage index budget neutrality factor to 1.0011. This proposed rule would apply a refinement standardization factor of 0.9927. ++ The fixed dollar loss threshold amount from $38,110 to $39,360, to maintain estimated outlier payments at 2 percent of total estimated aggregate IPF PPS payments. <HD SOURCE="HD3">2. Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program</HD> For the Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program, we propose to modify the reporting period of the 30-Day Risk-Standardized All Cause Emergency Department (ED) Visit Following an IPF Discharge measure, to remove the COVID-19 Vaccination Coverage Among Healthcare Personnel (HCP) measure, to remove the Facility Commitment to Health Equity measure, to remove the Screening for Social Drivers of Health and Screen Positive Rate for Social Drivers of Health measures, and to update and codify changes to the Extraordinary Circumstances Exception (ECE) policy. In addition, we are soliciting feedback on three topics through requests for information on a potential future star rating system for IPFs, future measures for the IPFQR Program, and on using the Fast Healthcare Interoperability Resources® (FHIR®) standard for electronic exchange of healthcare information for patient assessment reporting. <HD SOURCE="HD2">C. Summary of Impacts</HD> <GPOTABLE COLS="2" OPTS="L2,tp0,i1" CDEF="s75,r100"> <TTITLE> </TTITLE> <CHED H="1">Provision description</CHED> <CHED H="1">Total transfers & cost reductions</CHED> <ROW> <ENT I="01">FY 2026 IPF PPS payment update</ENT> <ENT>The overall economic impact of this proposed rule is an estimated $70 million in increased payments to IPFs during FY 2026.</E ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 274k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━